CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL
OFFICERS
I. Covered Officers/Purpose of the Code
This code of ethics (the "Code")
for Sequoia Fund, Inc. (the "Fund") applies to
the Fund's Principal Executive Officer, Principal Financial
Officer and any other officer serving similar functions
(the "Covered Officers," each of whom is set forth
in Exhibit A) for the purpose of promoting: honest and ethical
conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional
relationships:
- full, fair, accurate, timely and understandable
disclosure in reports and documents that the Fund files
with, or submits to, the U.S. Securities and Exchange Commission
("SEC") and in other public communications made
by the Fund;
- compliance with applicable laws and governmental
rules and regulations;
- the prompt internal reporting of violations
of the Code to an appropriate person or persons identified
in the Code; and
- accountability for adherence to the
Code.
Each Covered Officer should adhere to a
high standard of business ethics and should be sensitive
to situations that may give rise to actual as well as
apparent conflicts of interest.
II. Covered Officers Should Handle Ethically Actual
and Apparent Conflicts of Interest
Overview. A "conflict of interest"
occurs when a Covered Officer's private interest interferes
with the interests of, or his service to, the Fund. For
example, a conflict of interest would arise if a Covered
Officer, or a member of his family, receives improper personal
benefits as a result of his position with
the Fund.
Certain conflicts of interest arise out of
the relationships between Covered Officers and the Fund
and already are subject to conflict of interest provisions
in the Investment Company Act of 1940 (the "1940 Act")
and the Investment Advisers Act of 1940 ("Advisers
Act"). For example, Covered Officers may not individually
engage in certain transactions (such as the purchase or
sale of securities or other property) with the Fund because
of their status as "affiliated persons" of the
Fund. The Fund's and the investment adviser's compliance
programs and procedures are designed to prevent, or identify
and correct, violations of these provisions. This Code does
not, and is not intended to, repeat or replace these programs
and procedures, and such conflicts fall outside of the parameters
of this Code.
Although typically not presenting an opportunity
for improper personal benefit, conflicts arise from, or
as a result of, the contractual relationship between the
Fund and the investment adviser of which the Covered Officers
are also officers or employees. As a result, this Code recognizes
that the Covered
Officers will, in the normal course of their duties (whether
formally for the Fund or for the adviser, or for both),
be involved in establishing policies and implementing decisions
that will have different effects on the adviser and the
Fund. The participation of the Covered Officers in such
activities is inherent in the contractual relationship between
the Fund and the adviser and is consistent with the performance
by the Covered Officers of their duties as officers of the
Fund. Thus, if performed in conformity with the provisions
of the 1940 Act and the Advisers Act, such activities will
be deemed to have been handled ethically. In addition, it
is recognized by the Fund's Board of Managers (the "Board")
that the Covered Officers may also be officers or employees
of one or more other investment companies covered by this
or other codes.
Other conflicts of interest are covered by
the Code, even if such conflicts of interest are not subject
to provisions in the 1940 Act and the Advisers Act. The
following list provides examples of conflicts of interest
under the Code, but Covered Officers should keep in mind
that these examples are not exhaustive. The overarching
principle is that the personal interest of a Covered Officer
should not be placed improperly before the interest of the
Fund.
* * * *
Each Covered Officer must:
- not use his personal influence or personal
relationships improperly to influence investment decisions
or financial reporting by the Fund whereby the Covered Officer
would benefit personally to the detriment of the Fund;
- not cause the Fund to take action, or to
fail to take action, for the individual personal benefit
of the Covered Officer rather than the benefit the Fund;
- not use material non-public knowledge of
portfolio transactions made or contemplated for the Fund
to trade personally or cause others to trade personally
in contemplation of the market effect of such transactions;
- report at least annually any ownership interest
in the Fund or its adviser.
There are some conflict of interest situations
that should always be discussed with the [Compliance Officer],
if material. Examples of these include:
- service as a director on the board of any
public or private company;
- the receipt of any gifts other than ones
of de minimis value;
- the receipt of any entertainment from any
company with which the Fund has current or prospective business
dealings unless such entertainment is business-related,
reasonable in cost, appropriate as to time and place, and
not so frequent as to raise any question of impropriety;
- any ownership interest in, or any consulting
or employment relationship with, any of the Fund's service
providers, other than its investment adviser, principal
underwriter, if any, administrator or any affiliated person
thereof;
- a direct or indirect financial interest in
commissions, transaction charges or spreads paid by the
Fund for effecting portfolio transactions or for selling
or redeeming shares other than an interest arising from
the Covered Officer's employment, such as compensation or
equity ownership.
III. Disclosure and Compliance
- Each Covered Officer should familiarize
himself with the disclosure requirements generally applicable
to the Fund.
- Each Covered Officer should not knowingly
misrepresent, or cause others to misrepresent, facts about
the Fund to others, whether within or outside the Fund,
including to the Fund's directors and auditors, and to governmental
regulators and self-regulatory organizations.
- Each Covered Officer should, to the extent
appropriate within his area of responsibility, consult with
other officers and employees of the Fund and the adviser
with the goal of promoting full, fair, accurate, timely
and understandable disclosure in the reports and documents
the Fund files with, or submits to, the SEC and in other
public communications made by the Fund.
- It is the responsibility of each Covered
Officer to promote compliance with the standards and restrictions
imposed by applicable laws, rules and regulations.
IV. Reporting and Accountability
Each Covered Officer must:
- upon adoption of the Code (or thereafter
as applicable, upon becoming a Covered Officer), affirm
in writing to the Board that he has received, read, and
understands the Code;
- annually thereafter affirm to the Board
that he has complied with the requirements of the Code;
- not retaliate against any other Covered
Officer or any employee of the Fund or its affiliated persons
for reports of potential violations that are made in good
faith; and
- notify the [Compliance Officer] promptly
if he knows of any violation of this Code. Failure to do
so is itself a violation of this Code.
The [Compliance Officer] is responsible
for applying this Code to specific situations in which
questions are presented under it and has the authority
to interpret this Code in any particular situation.(1)
However, any approvals or waivers(2) sought by the Principal
Executive Officer will be considered by the Board.
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1 - The Compliance Officer is authorized to consult, as
appropriate, with the Board and counsel to the Fund, and
is encouraged to do so.
2 - Item 2 of Form N-CSR defines "waiver"
as "the approval by the registrant of a material
departure from a provision of the code of ethics"
and "implicit waiver," which must also be disclosed,
as "the registrant's failure to take action within
a reasonable period of time regarding a material departure
from a provision of the code of ethics that has been made
known to an executive officer" of the registrant.
The Fund will follow these procedures in
investigating and enforcing this Code:
- The [Compliance Officer] will take all appropriate
action to investigate any potential violations reported
to him;
- if, after such investigation, the [Compliance
Officer] believes that no violation has occurred, the [Compliance
Officer] is not required to take any further action;
- any matter that the [Compliance Officer]
believes is a violation will be reported to the Board;
- if the Board concurs that a violation has
occurred, it will consider appropriate action, which may
include: (i) review of, and appropriate modifications to,
applicable policies and procedures; (ii) notification to
appropriate personnel of the investment adviser or its board;
or (iii) a recommendation to dismiss the Covered Officer;
- the Board will be responsible for granting
waivers, as appropriate; and
- any changes to or waivers of this Code will,
to the extent required, be disclosed as provided by SEC
rules.
V. Other Policies and Procedures
This Code shall be the sole code of ethics
adopted by the Fund for purposes of Section 406 of the Sarbanes-Oxley
Act and the rules and forms applicable to registered investment
companies thereunder. If other policies or procedures of
the Fund, the Fund's adviser or other service providers
that govern or purport to govern the behavior or activities
of the Covered Officers who are subject to this Code overlap
or conflict with the provisions of this Code, the [Compliance
Officer] will determine whether the provisions of this Code
or such other policy or procedure will apply. The Fund's
and its investment adviser's codes of ethics under Rule
17j-1 under the 1940 Act are separate requirements applying
to the Covered Officers and others, and are not part of
this Code.
VI. Amendments
Any amendments to this Code, other than amendments
to Exhibit A, must be approved or ratified by a majority
vote of the Board, including a majority of independent directors.
VII. Confidentiality
All reports and records prepared or maintained
pursuant to this Code will be considered confidential and
shall be maintained and protected accordingly. Except as
otherwise required by law or this Code, such matters shall
not be disclosed to anyone other than the Fund and its adviser.
VIII. Internal Use
The Code is intended solely for the internal
use by the Fund and does not constitute an admission, by
or on behalf of the Fund, as to any fact, circumstance,
or legal conclusion.
Adopted: September 8, 2003
Exhibit A
Persons Covered by this Code of Ethics:
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Richard T. Cunniff - Vice Chairman
Robert D. Goldfarb - President
David M. Poppe - Executive Vice President
Joseph Quinones, Jr. - Vice President, Secretary,
Treasurer & Chief Compliance Officer
Michael Valenti - Assistant Secretary
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